Before opening my real estate brokerage in 2008, I worked in the mortgage industry. Having that body of knowledge about lending programs and practices has been invaluable to my real estate clients.
In many cases, my ability to counsel them on the best loan product and terms for their particular situation was the difference between them becoming a homeowner or remaining a renter.
That’s why every single one of my company’s agents is trained extensively and continuously on mortgage products. We serve a rather diverse community in Northern California, where about 70 percent of our clients are Hispanic and close to 40 percent of them are first-time homebuyers.
Unfortunately, we are aware of the gap in homeownership rates amongst the Hispanic community opposed to White homeowners. So, we pride ourselves in our diligent effort to turn people into homeowners by counseling them on their numerous lending options.
Typically, real estate agents leave the financing to their preferred lender, instead of immersing themselves in the mortgage part of the transaction.
However, I have found there is a greater degree of personal investment among our agents when they help: find the right program, incorporate the best down payment assistance programs, counsel clients on if they should buy down the interest rates to reduce their monthly repayment, and align on the terms that best suit each individual buyer.
I hardly come across loan officers who provide the level of personalized service that we do and who take the time to break down the many acronyms that are used in lending lingo, and I understand because sometimes we forgot how confusing it can all be to someone not in the mortgage industry, especially first-time buyers.
This has been a very important part of our firm’s value proposition, which sets us apart from our brokerage competitors. This differentiator is becoming even more pronounced in today’s real estate market conditions.
As we contend with increasing home prices and rising mortgage rates, real estate agents need to think outside the box and take it back to the old days when customer service was everything.
When we meet with clients in person and explained everything in person. Offering more solutions for our clients or we risk not being able to help people understand the value of becoming homeowners. We get paid a good commission and got spoiled but now is the time to spoil the client.
Right now, we are working with sellers to offer credits at closing to help cover the buyer’s closing costs, which reduces the amount of money a buyer needs to bring to closing. We also negotiate with sellers to offer credits up front to pay for repairs.
In addition, we are counseling clients on whether to pay a year’s worth of mortgage insurance in advance to lower their monthly payments.
We also work with a credit union that offers 100 percent financing at higher than market mortgage rates but with no mortgage insurance and lower credit score or even ITIN homebuyers.
Education is key
We spend a lot of time educating consumers and dispelling misconceptions many have about what it takes to buy a home. Many assume they need a 20 percent down payment, which is not true for first-time homebuyers who can put just 3.5 percent down with an FHA loan.
People also think they need outstanding credit to qualify for a mortgage, which is not the case. Many people with less-than-perfect credit (as low as 580) make plenty of money but have not paid bills on time.
In this scenario, a client could pay down the higher interest rate that a person with low credit is offered to lower their monthly payments.
Having detailed knowledge of the many programs and options that can be bundled goes a long way. And of course, having their best interest at heart at all times is crucial.
This trusted advisor role also leads to many of our agents becoming the “family” realtor, and they benefit from referrals and repeat business. In fact, most of the clients I worked with this year were repeat clients or children of previous clients.
Being mortgage savvy in today’s climate is a smart strategy, and the time you invest in gaining this knowledge will pay off in any market because you make yourself indispensable to your client.
Janet Ramirez is broker/owner of Better Homes and Gardens Real Estate Integrity which serves California’s Central Valley, including San Joaquin and Stanislaus Counties. Connect with her on Linkedin.